Former RBI Governor Raghuram Rajan during a recent interaction said that he is not interested in joining politics nor does he intend to float any political party as it will hamper his otherwise peaceful family life.
Rajan, a renowned financial pundit and a former chief economist at the International Monetary Fund (IMF), spoke to the Mint about the challenges and dispensation awaiting the next Union government.
The ex-RBI governor spoke about Nyunatam Aay Yojna or NYAY proposed by the Congress, and the Modi government's success. Rajan was in Chennai attending a board meeting of Krea University, where he is a member of its governing council.
“First, my wife has said she will not stay with me if I join politics… Politics everywhere is similar. It is not particularly noisy or whatever, I don’t have any taste for it. Somebody else can give the speeches and gain the votes,” Rajan said when asked if he has something against joining politics.
He further said he will not be “floating a party. My writings are all out there, you know my views. The point is I have no interest in politics. Absolutely none.”
"I am happy where I am", said the 56-year-old, putting all speculations to rest that he will be appointed a minister if Congress comes to power.
“That’s too many steps, too far. Unfortunately, given the kind of work that I have done here, there is an expectation that my primary function is in the public arena. No, my primary job is academic. I like the job. I am a reasonably engaged academic. I have written a book recently (“The Third Pillar”) which is more intellectual than polemic. So given all that, I am very happy where I am,” Rajan said.
Rajan stated he will also be happy to assist in “some useful way”. “I am happy to do it. Sometimes people want advice, and I’m happy to do it”.
“We have not moved the needle unlike what was anticipated", he said speaking about the incumbent BJP government.
“It may be good enough to keep going, 7% is nothing to be sneezed at. Then is it 7% with or without jobs? That is another issue. The underlying theme is that growth has some concerns. Have we changed the kind of economic framework for the world of tomorrow? I’d say no. I’d say this is pretty much the framework we had for a long time.”
However, Rajan said that the government's success has to be measured carefully.
“There is continuity in governance. NDA looks a lot like what UPA did — emphasised the same thing like GST, Direct Benefit Transfer, Aadhaar. If you tick off all the reforms that have been done, there is a continuity in that. The question again is, is that good news? It goes back to, can we afford the average? And the job situation would suggest that we really need to think about do we need a reboot,” he pointed out.
The former RBI governor said that whether the same government retains power or a new one comes in, the challenges are the same - reforms, mechanisms to tackle economic challenges, and jobs - “will be no 1 for any new government."
“It is not that there are no jobs, there are no good jobs. Do we have the economic apparatus to enable us for the next phase of growth? Do we have research forces in various universities that are gonna help industries become a force? I have not seen that,” Rajan said.
“Are we investing in areas of those researches are also not clear. Electric batteries for example. Are we able to take up the jobs that are leaving China? I’d argue, anecdotally, that investors prefer coming to Vietnam, or even some times Bangladesh, than here. So, jobs will be no 1 for any new government,” he added.
The country needs “structures around the market to help people live productive lives," Rajan said when asked whether Congress' NYAY scheme is a better avenue to transfer cash than welfare schemes.
“The broader point about direct income transfers, which both NDA and UPA have agreed on, is that it can empower people. That doesn’t mean in every place the government will open a medical dispensary for the people to be able to buy. But once they have money power, people can go to private dispensary set up. And now that people have money to buy, the medicine is actually there. This is how they will evolve. It is not just about what it will do today,” he said.
“Let’s push more powers and funding down to the community so that they can actually respond. Some of these direct income transfer schemes are a way of pushing more power directly to the people. Of course, the devil lies in the details. You have done attempts of poverty alleviation for so many decades, with very limited results. So we should experiment, carefully,” he said.
“This has negative effects on the family, especially when you used to have those jobs and you don’t have now,” he said, referring to the absence of good middle-class jobs.
“They (people) are getting very angry because they are slipping on social security.”